Base Rates

Florida Power & Light announced today that it struck a deal with consumer advocates and others to freeze base rates through the end of 2012. The agreement is with the Attorney General, representatives of large business customers, the Office of Public Counsel, the state's advocate for utility customers. The Public Service Commission must approve the deal. "We think this agreement is in the best interest of all of the parties involved, especially our customers," said FPL President Armando Olivera.

After hours of back and forth discussions, the state's utilities regulators unanimously approved Thursday a Florida Power & Light Co. settlement agreement for $350 million in base-rate increases over the next four years. "At the end of the day, I believe this is a good deal for consumers and a good deal for the company," said Ronald Brise, chairman of the Florida Public Service Commission. Beginning January 2013, the typical FPL customer who uses 1,000 kilowatt hours per month, will see a 37-cent reduction in their monthly bill, said Mike Sole, FPL's vice president of state governmental affairs.

Florida Power & Light prepared the grid to deal with near-freezing temperatures Tuesday, regulators approved another type of freeze for the utility's customers. The state Public Service Commission on Tuesday unanimously accepted a deal to keep FPL customers' base rates flat through the end of 2012. Base rates, which pay for parts of FPL employees' salaries and other operating and maintenance costs, make up less than half of a typical customer's bill. FPL can still ask for an increase for other parts of the bill that pay for expenses such as fuel costs.

After hours of back and forth discussions, the state's utilities regulators unanimously approved Thursday a Florida Power & Light Co. settlement agreement for $350 million in base rate increases over the next four years. "At the end of the day, I believe this is a good deal for consumers and a good deal for the company," said Ronald Brise, chairman of the Florida Public Service Commission. Beginning January 2013, the typical FPL customer who uses 1,000 kilowatt hours per month, will see a 37-cent reduction in their monthly bill, said Mike Sole, FPL's vice president of state governmental affairs.

Florida Power & Light Co. customers will pay about $1 more on their monthly electric bills starting March 1 under new base rates approved by state regulators Friday. But the overall monthly bills will decline because of lower fuel costs and storm surcharges. The Public Service Commission approved what amounts to a 1 percent increase for residential customers using 1,000 kilowatt-hours of energy a month to pay for a $75 million base rate hike it approved earlier this month. The increase is 6 percent of the $1.27 billion FPL had requested.

Florida Power & Light proposes increasing electric rates by at least $1 billion a year starting next year. The company submitted a proposal Wednesday to the Florida Public Service Commission to increase base power rates by $1 billion in 2010 and another $1.25 billion in 2011. FPL, the state's largest utility with 4.5 million customers, said the increase would allow it to earn a "fair" profit, while making its infrastructure stronger, more efficient and less likely to emit greenhouse-gas emissions.

The Office of Public Counsel will recommend today that FPL reduce its base rates by $364 million -- or about 9 percent -- instead of increasing them. FPL collects $3.7 billion to $3.9 billion for base rates and proposes collecting about $1.3 billion more. If approved, FPL customers that use 1,000 kilowatt-hours per month -- less than what the average customer uses -- could pay as much as $12.40 more a month beginning next year if customer-fuel charges don't decline as projected. Under the office's proposal, they would likely drop by at least a few dollars a month.

The Public Service Commission Monday begins eight days of hearings on Florida Power & Light Co.'s petition to raise electric bills in January. Regulators will hold the hearings in Tallahassee and are expected to reach a decision in November. FPL is asking regulators for a $430 million increase in base rates -- the fees it charges for electric power -- for 4.3 million customers in 35 counties. The utility, with 2.5 million customers in South Florida, says the increase is needed to build new power plants and transmission lines, generate cash for its depleted hurricane reserve fund and finance part of a regional power transmission system.

The Public Service Commission is set to weigh FPL's plan to cut energy use today and its proposed agreement with consumer groups to freeze base rates through 2012. The rate freeze agreement would allow a base rate increase to pay for FPL's new natural gas power generator in western Palm Beach County, but only in an amount equal to the projected fuel cost savings from the unit. The result: customers' base rates would not change. The PSC will also consider discounts and rebates FPL proposes to meet aggressive new energy conservation goals set by regulators.

April showers bring May flowers - and the last of cheaper water bills. Starting May 1, Boynton Beach water customers could pay more for drinking water and wastewater service. Commissioners will consider the water rate hikes Tuesday and hold a public hearing for the city's 96,000 customers that include residents from unincorporated areas to the west and parts of Hypoluxo, Briny Breezes and Ocean Ridge. Under the proposal, users will see increases in their base rates and on water volume rates that will help keep the city's utility fund afloat.

Florida Power & Light says customers will benefit in the future because of "certainty. " Critics say, not so fast. But as state regulators weigh a controversial settlement proposal that would lead to a $378 million increase in FPL's base rates in January, they also will have to consider hundreds of millions of dollars in additional rate hikes that would come later for new power plants. FPL and some major power users argued this week that the state Public Service Commission should approve the proposed settlement, which builds in base-rate increases during the next four years to help pay for power-plant projects at Cape Canaveral, Riviera Beach and Port Everglades. Robert Barrett, FPL's vice president of finance, testified Tuesday that the additional increases, known in utility lingo as "generation base rate adjustments," or GBRAs, are an "essential component of this agreement.

The Office of Public Counsel says regulators should reject a deal struck between FPL and the state's big power users because it benefits only the parties involved, shifting costs to residents and other customers. The Public Counsel filed its formal objections to the settlement on Wednesday, the deadline for responses a deal announced a week ago by FPL and industrial, hospital and military power users. FPL has said the settlement is fair and give reductions in rates to all customers.

Florida Power & Light Co, said it pays above-average salaries, but those that are on par or even lower than those at comparable utilities, said FPL director of compensation Kathleen Slattery at Thursday's rate hike hearing. FPL's pay increases are "reasonable, prudent and necessary" to employ the caliber of worker to deliver top performance, Slattery said. Payroll costs have increased by 10 percent since 2009, but are expected to decline by 2.5 percent next year, she said. The average salary, not including benefits, is $73,200 for non-union employees, Slattery said.

Florida's large power users said Wednesday they have reached an agreement with Florida Power & Light Co. to propose a smaller rise in basic electric rates next year. But the state's top consumer advocate said the settlement is actually a hidden rate hike. The proposal comes just as the electric utility is set to begin regulatory hearings on the increase on Monday. FPL and the other parties are asking regulators to suspend hearings and approve the settlement. On the typical 1,000-kilowatt residential bill, the increase under the settlement would be about a buck less: $5.93 a month on a base rate of $49.19.

Florida Power & Light on Friday revised its base rate requests per-household share upward by 12 cents, from $6.97 to $7.09, per 1,000-kilowatt residential bill. The total amount of the request — $690.4 million — doesn't change, the utility said. In its informational filing to state regulators Friday, FPL blamed the per-household revision to its March 19 filing on an "allocation" error. At the same time, the utility announced that it expects its fuel costs to drop next year.

Florida Power & Light President Armando Olivera announced today that he is retiring in May after 40 years with the company. Eric Silagy, FPL's senior vice president of regulatory and state government affairs, will replace him. He will be responsible for leading the state's largest utility as it prepares to ask for a base rate increase in 2012 and defend proposals to build new gas-fired and nuclear generators. Olivera, who has an undergraduate degree in electrical engineering from Cornell University and an MBA from the University of Miami, joined FPL in 1972 as an engineer trainee, working up to a senior vice president and then president in 2003.

Florida Power & Light Co. wants to increase base rates starting in 2010. FPL estimated last year that it expects to increase rates by about $800 million to $950 million annually, according to SEC documents. FPL is expected to submit the exact figures to the Public Service Commission today. The company issued a statement today saying the proposed increase would be more than offset by a projected decrease in fuel costs passed to customers, saving customers 4.5 percent. But FPL says that the boost in base rates and its projected decrease in fuel costs for 2010 will decrease bills by $4.92 a month -- from $109.

Regulators will vote today on whether to allow Florida Power & Light to charge about 23 cents a month next year for customers who use 1,000 kilowatt-hours for nuclear-related equipment. Even with the increase, a typical customer's monthly bill would decrease by $1.92 , according to FPL Spokeswoman Jackie Anderson. FPL announced Monday that its projected fuel costs for next year are less than expected, more than offsetting increases in environmental and other costs. The state Public Service Commission's staff recommends approving the roughly $20 million increase requested by FPL to pay for equipment the utility started using this year for its proposed expansion of existing nuclear reactors.